Can I get approved for a home loan?

My fiance and myself are in a frustrating situation, and we’re about at the end of our rope. We live in Minnesota, the metro area, and we’re considering purchasing a home versus renting for reasons I will mention later. We both make $ 26,000 a year, her credit score is in the low 600’s while my credit score is in the mid 700’s. I have limited rental history (just a year) and she has a deeper rental history, but she also has a foreclosure that is nearly 3 years old now.

With her score and relatively recent foreclosure she is certain she won’t qualify, however with my score I might, but every pre-qualification application and mortgage calculator I use says no lender would approve me for a loan–how can this be? Does it deal more with your income than it does your credit score?

Would we be capable of qualifying on a joint application even with the above-mentioned status? We originally wanted to rent, but we are finding that renting is way too expensive and with 3 children there are few places that allow more than 4 people in an apartment/town-home, and the income restricted apartments have a long waiting list.

We also have no desire to live in a Section 8 area, as we have seen most of them and they are, no offense, complete ghettos that we won’t raise the kids in. Also because we “make too much money” we do not qualify for any assistance. What exactly are we supposed to do?

Is there any hope at all with our salaries that we can qualify for a home around $ 100,000-$ 125,000? Share with me your thoughts please! I have tried FHA, and they have no lenders either in my scenario.

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